Summaries of health policy coverage from major news organizations

Calif. Doctor Shortage Could Lead to Higher Rates on Exchange Plans

The shortage of physicians in California is giving some health care providers more leverage to demand higher reimbursement rates from insurance plans offered through the state insurance exchange, the San Jose Mercury News reports.

Details of Higher Reimbursement Deals

Some providers have refused to join networks for exchange health plans because of the lower reimbursement rates. Reimbursements for plans offered through Covered California often are up to 30% lower than payments offered by non-exchange plans.

Richard Thorp, president of the California Medical Association, said physicians "have to make an individual choice based on whether they can afford to service those contracts."

The providers' refusals to participate in certain networks sometimes has led insurers to offer higher reimbursement rates to meet physician network requirements for exchange plans.

State regulations require insurers to provide policyholders with options for primary care within 15 to 30 miles of their homes. In addition, the state requires insurer networks to have one physician for every 1,200 patients.

Blue Shield of California and Anthem Blue Cross both acknowledged that they have made such deals with providers.

Steve Shivinsky, a spokesperson for Blue Shield, said the insurer has restored higher rates for 1,400 providers -- many of whom practice in rural areas. However, Shivinsky said that is "a tiny fraction" of the 35,000 providers in the insurer's network.

Implications

According to the Mercury News, the implications of such "side deals" are unclear, but they could result in higher premium rates for health plans offered through the exchange.

Anthem spokesperson Darrel Ng said that the higher medical costs rise, "the higher the premium will likely be on the exchange in the future."

The higher reimbursement rates also were discussed during a Covered California board meeting on Thursday.

Kim Griffin, chair of Medical Office Managers of the Peninsula, sent a letter to the board stating that many practices have "opted out" of exchange networks because of the discounted reimbursements (Seipel, San Jose Mercury News, 2/24).

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